As the fiscal year draws to a close, it's crucial to explore last-minute tax-saving opportunities. In the race against time to maximise tax savings, these investment options provide a strategic and effective approach. Whether opting for the security of fixed deposits, the tax efficiency of NSC, the stability of PPF, or the wealth creation coupled with tax benefits from ELSS, each avenue offers a unique way to secure your financial future while optimising your tax liability. Consider these smart last-minute investment avenues you can opt for to make the most of the remaining fiscal year.
Fixed Deposits (FDs)
Fixed deposits have emerged as a robust tool for tax saving, offering a five-year lock-in period and eligibility for deductions under Section 80C. Beyond the tax benefits, FDs are safeguarded by the Deposit Insurance and Credit Guarantee Corporation (DICGC), ensuring coverage up to Rs 5 lakh per bank and per depositor.
National Savings Certificate (NSC)
An initiative by the Government of India, NSC provides an additional avenue for tax-efficient investments. Accessible at post office branches, NSC offers a fixed-income investment with the current interest rate set at 7.7% per annum for the fourth quarter of the fiscal year 2023-24 (January-March).
Public Provident Fund (PPF)
PPF remains a stalwart option, providing an attractive interest rate of 7.1% and the coveted Exempt-Exempt-Exempt (EEE) status. This long-term investment not only ensures steady returns but also offers tax benefits, making it a reliable choice for taxpayers.
Equity Linked Savings Scheme (ELSS)
ELSS stands out as a unique mutual fund scheme that combines wealth creation with tax benefits. With a primary focus on equity investments (at least 65% of the corpus), ELSS aims for potentially high returns in the long run. What sets ELSS apart is its remarkable ability to help save taxes, with investments up to Rs. 1.5 lakh per year qualifying for deductions under Section 80C.